Editor’s note: We will do an end-of-winter price survey and ask cooperating companies for best estimate overviews of the season to come.
Mid-winter propane “spot” prices rose slightly from last month but are considerably higher, 123 percent higher, than the same time last year. Spot prices are those at point-of-production. A common national reference standard is the spot price at the Mont Belvieu, Texas, terminal, where this week it is $0.814 per gallon. Last year, same date, the spot price was $0.365 per gallon. In theory, anyone could walk in to the Mont Belvieu terminal and buy propane for the daily spot price.
The variance between “spot” and “delivery” price includes costs of transportation to regional storage facilities and distribution costs from local storage to point-of-use by end-consumers. Distribution costs also include costs of in-place safety programs and measures, as well as taxes and government fees from local, state and federal regulations.
Residential propane delivery prices vary widely nationally. This week, the national home delivery price is $2.46 per gallon. Regionally, the lower Atlantic region is paying the most per gallon at an average of $3.20; the Midwest is paying the least at an average of $1.83 per gallon; and the West is near the national average at $2.56 per gallon.
Propane pricing is not government regulated, meaning that propane delivery companies can charge whatever the market will bear. On the Hill, those prices can vary widely. Some users are paying around $2 per gallon while others may be paying nearly twice as much. It is in the consumer’s interest to shop — not just for best price per gallon, but to understand other associated charges and fees.
Because prices can be negotiated, it is important to know what questions to ask, in addition to price-per-gallon, before contracting with or changing a local supplier — questions such as:
• What is the price per gallon (ppg) for new-user “first fill” as opposed to ppg for existing customers?
• What is the difference in ppg if tank is owned by the customer instead of leased from the propane provider (ppg for customer-owned tank can be significantly lower)?
• Does the propane provider sell tanks and if so, what is the cost, for either new or refurbished tanks?
• What does the provider charge for annual tank rentals (those fees can vary widely among area providers)?
• Does the provider have large-capacity propane storage facilities either on the Hill or at the bottom of the Hill (if a company has storage facilities, it is better able to keep customer ppg relatively stable when refinery spot prices are spiking)?
• What are the policy differences and additional charges for being on a fill-as-needed route as opposed to fill-on-demand from customer who has elected to call in when they need a fill?
• And lastly, what charges are there, if any, for emergency fills if, for any reason, the propane tank becomes empty?
Of those companies that will provide information to the Town Crier (Suburban and Ferrellgas historically have not), this week’s propane pricing is as follows:
• AC Propane pricing is not available this week as owner Dave Castaldo is out of town. Most recent end-of-year pricing was $2.39 per gallon and $1.99 for customer-owned tank.
• Amerigas community pricing is up from $1.99 per gallon to $2.19 with no discount for customer-owned tank. Tank rental is $40 per year
• Diamond Valley is at $2.54 per gallon and $2.34 for customer-owned tank. Tank rental is $32.33 per year.
• SoCal Propane is at $2.77 per gallon and $2.47 for customer-owned tank with discounts per gallon for veterans and for customer referrals (Discount of 10 cents per gallon ongoing for veterans and 10 cents per gallon per season both for a customer who refers a new customer and also for the new customer. Tank rentals are $70 per year for a 250-gallon tank and $80 for a 500-gallon tank.